Ticket 931 points out a bug in the pre_update_term filter which can be fixed by moving the arguments to the filter around, or by getting rid of it.
I favour getting rid of it because the "get_term" filter can do the same thing and it's a core WP filter. (http://adambrown.info/p/wp_hooks/hook/get_term)
If your plugin or site uses pre_update_term, please update it to use get_term instead. The old pre_update_term filter is still in the 2.7 branch but it's likely to disappear in 2.7.1
